Beer and Wine Tax

Disclaimer: The information on this page does not replace the law found in the Liquor Tax Act, 1996, and related regulations.

Beer and wine taxes are included in the price you pay for:

• beer made by an Ontario beer manufacturer, microbrewer or brew pub that you buy from:
  • Brewers Retail Inc. (i.e., The Beer Store)
  • licensed establishments, such as restaurants, bars and brew pubs
  • on‑site retail stores of beer manufacturers or microbrewers, and
  • southern LCBO Convenience Outlets (e.g., cottage‑country agency stores).
• wine and wine coolers made by an Ontario winery that you buy from:
  • the Ontario winery’s retail store located on the winery’s production site, and
  • an Ontario winery retail store located off the winery’s production site if the wine or wine cooler is manufactured by the owner of the off-site winery retail store.  These off-site stores include:
    • standalone off-site winery retail stores
    • stores located inside the shopping area of a grocery store with a shared checkout, referred to as wine boutiques

For the purposes of this page, wine includes wine coolers.

If you make your own beer or wine, or if you purchase these beverages from the Liquor Control Board of Ontario (LCBO) or a retail outlet that purchases its alcohol from the LCBO, such as a grocery store or convenience store, you do not pay beer and wine taxes on those beverages.

Tax rates - Beer

Beer

Beer tax includes:

• beer basic tax
• volume tax
• environmental tax (if applicable).

Draft beer made and bought at a brew pub or a secondary location of the brew pub is subject to the beer basic tax only.

Beer basic tax

The beer basic tax is calculated based on the volume of beer bought.

The tax rate that applies to the beer depends on:

1. what type of beer it is (draft beer (e.g., from a keg 18 litres or larger) or non‑draft beer (e.g., bottled beer), and
2. who made the beer (beer manufacturer, microbrewer, or brew pub).

For example, on a 341mL bottle of non-draft beer made by a microbrewer purchased on September 1, 2025, the beer basic tax will be 0.341L × $0.1988/L = $0.0677.

Adjustments to beer basic tax rates

The beer basic tax rates are adjusted based on the Consumer Price Index for Ontario over the past three years. The Minister has prescribed March 2, 2026, as the next adjustment date and every March 1st thereafter.

Beer volume tax

The beer volume tax is calculated based on the volume of beer bought. The tax rate is 17.6 cents per litre regardless of whether the beer is draft beer or non‑draft beer and whether the beer was made by a beer manufacturer or a microbrewer.

The beer volume tax does not apply to draft beer made and bought at a brew pub or a secondary location of the brew pub.

Environmental tax

The environmental tax is 8.93 cents for each non‑refillable container in which the beer bought is packaged.

The environmental tax does not apply to draft beer made and bought at a brew pub or a secondary location of the brew pub.

Microbrewers

At the end of each production year (calendar year), the Ministry of Finance determines whether a brewer has met all the required criteria to qualify as a microbrewer in the upcoming sales year (commencing in March). If you qualify as a microbrewer, for a sales year, the beer you sell is subject to the lower beer basic tax rates.

What is a Production Year

A production year in relation to a sales year is the calendar year immediately before the beginning of the sales year. For example, for the sales year from March 1, 2023 to February 29, 2024, the relevant production year is January 1, 2022 to December 31, 2022.

What is a Sales Year

A sales year is a period of approximately twelve months that runs from March 1 to the end of the following February unless:

• March 1 is a Saturday or Sunday, in which case the sales year begins on the Monday.
• The last day of February is a Friday or Saturday, in which case the sales year ends on the Sunday.

Qualification Criteria

To qualify as a microbrewer, in a sales year, certain criteria must be met. 

1. For a sales year beginning on or after March 2, 2026:
   • the brewer’s worldwide production of beer in the preceding production year was not more than 49,000 hectolitres, or
   • the brewer’s average annual worldwide production of beer, based on the last five production years (excluding any production years in which the brewer’s worldwide production was zero), was not more than 49,000 hectolitres, or
   • if this is the first production year in which it manufactures beer, its worldwide production of beer for the production year is expected to be not more than 49,000 hectolitres.
2. In the preceding production year, the brewer was not party to any agreement or other arrangement that would exclude it from qualifying (refer to the section below titled Can a contract arrangement with a non-microbrewer impact the status of a microbrewer?).
3. Every affiliate that the brewer had that manufactured beer in the preceding production year was a microbrewer.

The Ministry of Finance will verify qualification with each brewer before the beginning of the sales year.

Read on: list of Ontario beer manufacturers and microbrewers and the brands of beer they make.

Worldwide Production

A brewer’s worldwide production means production anywhere in the world, not just Ontario, and includes all beer manufactured during the production year by:

• the brewer, even if the beer is manufactured under contract for another brewer,
• any affiliate of the brewer, even if the beer is manufactured under contract for another brewer, and
• another brewer under contract for the brewer (or its affiliates).

If you are a microbrewer for the current sales year and wish to remain a microbrewer in the upcoming year, you must meet all of the qualification criteria or you will lose your status as a microbrewer and any resulting benefits.

Can a contract arrangement with a non-microbrewer impact the status of a microbrewer?

Commencing June 5, 2025, a microbrewer with a physical manufacturing facility in Ontario that makes commercial quantities of beer for sale in Ontario, may enter into a contract with a non-microbrewer for the production of beer for the microbrewer without the contract impacting its status as a microbrewer. Commercial quantities are quantities that are sufficient for a person to sell in the marketplace as part of a viable brewing business.

If a virtual brewer (i.e., no physical manufacturing facility) has an arrangement for beer to be made for it by another brewer, that other brewer must be a microbrewer at some point in the production year in order for the virtual microbrewer to qualify for and maintain its microbrewer status.

Can a virtual microbrewer enter into an arrangement for final packaging with a non‑microbrewer without it impacting their microbrewer status?

An arrangement with a non-microbrewer for only final packaging of your beer will not affect your microbrewer status.

In some cases, final packaging of the beer requires the filtering and carbonation process be performed immediately before the packaging, and in certain circumstances, some substances can only be added to the beer at the time of final filtration. In these situations, provided that they must be performed as part of the final packaging, filtering, carbonating and addition of substance will not affect your microbrewer status.

Read on: list of Ontario beer manufacturers and microbrewers and the brands of beer they make.

Tax Credit for Small Beer Manufacturers

The Taxation Act, 2007 includes a refundable corporate tax credit (Small Beer Manufacturers’ Tax Credit) for small beer manufacturers, that do not qualify as microbrewers (in a given sales year), provided the corporation meets all the required criteria (including limits on production).

Who qualifies for the Small Beer Manufacturers’ Tax Credit (SBMTC)?

In a given sales year, a beer manufacturer may qualify in respect of eligible sales of draft and non‑draft beer sold to purchasers in Ontario, if it meets certain criteria including:

• it has a permanent establishment in Ontario
• it did not qualify as a microbrewer for the sales year because its worldwide production of beer exceeds 4.9 million litres (49,000 hectolitres) using the lesser of the following amounts:
  • the corporation’s worldwide production of beer for the previous production year
  • the corporation’s average annual worldwide production of beer based on the last five production years (excluding any production years in which the brewer’s worldwide production was zero). (Note: This five-year average can only be used for determining qualification for a sales year commencing on or after March 2, 2026.)
• its worldwide production of beer was never more than 20 million litres (200,000 hectolitres) in any production year ending before January 1, 2018 and 30 million litres (300,000 hectolitres) in any production year beginning after December 31, 2017, and
• its total eligible sales in any sales year was never more than 20 million litres (200,000 hectolitres).

How much is the tax credit?

The tax credit amount is determined by the qualifying small beer manufacturer's eligible sales in the sales year. A qualifying small beer manufacturer could still receive the tax credit even if its eligible sales for the sales year do not exceed 49,000 hectolitres.

The tax credit is subject to a phase‑out once eligible sales exceed 75,000 hectolitres.

Where an eligible small beer manufacturer is affiliated with or deemed to be related to any other brewer(s) at any time in the sales years, the total amount of the tax credit is based on the combined sales of the related brewers. Each individual brewer, provided it otherwise qualifies for the credit, will receive its proportionate share.

How to receive the credit?

To receive the tax credit, a beer manufacturer must contact the Ministry of Finance to apply not more than 2 years after the end of the sales year for which it was eligible for the credit.

Provided it qualifies, a beer manufacturer will receive the tax credit as a lump sum at the end of the sales year for which it is eligible for the credit. However, it may opt to receive the tax credit in monthly instalments during the sales year if the request is made before the start of the sales year for which it is eligible for the credit.

Tax rates - Wine

Wine tax includes:

• wine basic tax (but is not applicable to Ontario wine purchased from on-site winery retail stores effective April 1, 2024)
• volume tax
• environmental tax.

Wine basic tax

The wine basic tax is calculated as a percentage of the retail price of the wine bought. The retail price is the price set for the wine by the winery, less the total of:

• any deposit on the container, and
• all taxes imposed on the purchase of the beverage under
  • Part IX of the Excise Tax Act (Canada) (i.e., the harmonized sales tax), and
  • Liquor Tax Act, 1996 (i.e., the wine tax).

The wine basic tax rate that applies to the retail price of the wine depends on:

1. whether it is an Ontario or non‑Ontario wine, and
2. whether it is:
   • purchased from a winery retail store located on the production site of the winery (on‑site or off‑site of the winery), or
   • manufactured by an owner of – and purchased from – a winery retail store not located on the production site of the winery (off-site winery retail store, including standalone off-site stores and stores located inside the shopping area of a grocery store with a shared checkout).

For tax purposes, “Ontario” generally means that the wine is produced almost entirely from 100 per cent Ontario‑grown produce.

Effective April 1, 2024, the wine basic tax does not apply to Ontario wine and wine coolers purchased from on-site winery retail stores.

Wine volume tax

The wine volume tax is calculated based on the volume of wine and whether the beverage is wine or a wine cooler.

For example, on a 750mL bottle of wine sold at a winery retail store, the wine volume tax would be 0.750L × $0.29/L = $0.2175.

Environmental tax

The environmental tax is 8.93 cents for each non‑refillable container in which the wine or wine cooler bought is packaged.

Ontario beer manufacturers, microbrewers, brew pubs and wineries

A beer manufacturer, microbrewer or licensee of a brew pub collects the beer taxes and amounts on account of the beer taxes on the beer it distributes in Ontario and must report and remit them to the Ministry of Finance. The reporting period is monthly and the return and tax remittance must be received by the 20th day of the next month.

A winery collects the wine taxes and amounts on account of the wine taxes on the wine it distributes at its winery retail store(s) located in Ontario, and must report and remit the taxes to the Ministry of Finance. The reporting period is monthly (or, if the winery qualifies and elects, each set quarter) and the return and tax remittance must be received by the 20th day after the end of the reporting period.

Filing a beer tax return or a wine tax return

Learn how to complete your beer tax return and schedules or your wine tax return.

• I am a beer tax collector
• I am a wine tax collector

Information about filing requirements, supporting schedules, penalties for late filing and failure to remit tax collected or payable and payment information for remitting the tax is also provided.

When beer tax collectors and wine tax collectors are deemed to be buyers of their own products

A beer manufacturer, microbrewer or licensee of a brew pub is deemed to be the buyer of the beer that it distributes in Ontario without charge and must pay the beer taxes on that beer. A beer tax collector is deemed to be the buyer of the beer that it buys but does not sell.

A winery is deemed to be the buyer of the wine it distributes in Ontario without charge and must pay the wine taxes on that wine. If a winery provides samples of wine at a charge and the charge does not cover all of the wine taxes associated with that sample, the winery is deemed to be the buyer of the sample to the extent of the shortfall and must pay the shortfall in the wine taxes for that sample.

Limited exemption for Ontario beer manufacturers, microbrewers, brew pubs and wineries

A beer manufacturer, microbrewer or licensee of a brew pub may claim an annualized limited beer tax exemption up to 10,000 litres of beer it distributes without charge in Ontario to promote its beer. 

Read on: Promotional distribution exemption for Ontario beer manufacturers and brew pubs.

A winery may claim an annualized limited wine tax exemption up to 10,000 litres of wine it distributes without charge in Ontario to promote its wine. 

Read on: Promotional distribution exemption for Ontario wineries.

Tax‑included pricing

The purchase price of all beer sold to purchasers by beer tax collectors (including beer manufacturers and microbrewers that operate their own brewery retail store) and all wine sold to purchasers at winery retail stores must include all beer and wine taxes payable.

Beer tax collectors, wineries and grocery stores with wine boutiques must provide information on the amount of the beer and wine taxes included in the price in a manner approved by the Minister of Finance.

Read on: Tax‑included pricing and requirements for beer tax collectors, wineries and certain authorized grocery stores

Alcohol licensing

The Alcohol and Gaming Commission of Ontario (AGCO) and LCBO are responsible for the general regulation of the beer and wine industries in Ontario, including the licensing of alcohol manufacturers and sellers.

Direct bank deposit

Get your Ministry of Finance refund or rebate faster with direct deposit! It's easy and secure.

Download: Direct Deposit Request / Direct Deposit Authorization